SINGAPORE: Despite tighter regulatory scrutiny and a clampdown on lending to foreigners, Australia’s property market still remains an attractive destination for Asian investors, analysts and industry players told Channel NewsAsia.

A recent survey by online real estate portal iProperty revealed Australia as the favourite overseas market among investors from Singapore and Malaysia. In particular, all of the Singaporeans surveyed have set their sights on the housing market down under and a majority plan to spend between S$1 million to S$1.5 million (US$0.74 million to $1.11 million).

For Indonesian investors, Australia is second on their list of preferred overseas property markets, while those in Hong Kong ranked it third after China and Japan, the same survey released in April showed.

Meanwhile, a separate poll by KPMG and the University of Sydney showed Chinese investors having a “highly positive medium-long term view of Australia” and will be keen to raise their investments in the year ahead.

This is despite tighter regulations on foreign property ownership in Australia, as the government faces pressure to rein in an investment-driven surge in home prices, particularly in Sydney and Melbourne, amid growing criticism that wealthy Asian buyers are making the property market increasingly unaffordable.

Last May, the Australian government toughened penalties for foreigners who breach existing rules that restrict them to buying new homes only. Fees were also levied for the first time on foreign investment applications, while purchases of agricultural land from overseas faced more scrutiny under new rules implemented in Feb 2015.

More recently, the country’s largest mortgage lender, Commonwealth Bank of Australia, rolled out stricter conditions for home loans to foreigners, joining ANZ and National Australia Bank.

ALLURE OF AUSTRALIA’S PROPERTY MARKET

However, these have not been enough to keep Asian investors at bay. Analysts attribute that to multiple factors such as the lure of a stable economy, perceptions of lower risk, higher yields and interest rates at a record low.

The appeal of Australia as an ideal location for studies and retirement also underpins the continuous flow of foreign investments, iProperty’s Singapore general manager and chief business development officer Sean Tan said.

For Singapore investors, the prospect of property cooling measures remaining in place has pushed buyers overseas, with savvy ones following the lead of major real estate developers such as Fragrance Group.

“Local big developers have always been interested in investing overseas, but the cooling measures forced their hands as they were not able to make the margins they used to,” Darien Bradshaw, executive director of international project marketing at CBRE Asia, said. “When a well-known brand buys into interesting sites overseas, non-institutional investors tend to follow them.”

Source：Channel News Asia